Malpractice Case: When a Payer's Denials Cause Trouble

Gordon T. Ownby


February 15, 2019

Medscape Editor's Key Points:

  • A denied authorization shouldn't always mean the end of the line for treatment.

  • You may want to phone the decision-maker or help the patient pursue authorization for treatment if you feel that care is in jeopardy.

  • Document your discussions with the patient and family on the rationale for getting the test or consultation.

Don't Let Denials Derail Proper Patient Care

When a treating physician believes that a referral to another specialist is appropriate, a denied authorization does not mean that the physician should just quietly soldier on.

A 15-year-old patient who had seen Dr. P, her pediatrician, for many years for routine childhood issues visited Dr. P for left thigh pain. She had recently run a mile in her physical education class and Dr. P prescribed Motrin for the pain. An x-ray of the femur was negative and Dr. P excused his young patient from physical education for 2 weeks.

The patient returned about 4 months later, complaining that the back of her thigh still hurt. Dr. P diagnosed muscle spasm and treated her again with Motrin. Lab work showed a slightly elevated sed rate and elevated enzymes. When the patient returned a week later with continuing complaints of thigh pain, Dr. P diagnosed fibromyalgia and initiated a trial of Lyrica® [pregabalin]. Dr. P referred the young patient for an orthopedic consult, but the patient's IPA [independent practice association] declined to authorize the referral.

The patient returned 2 weeks later and reported that she had recently been to the ER, where the physician recommended that she use crutches. Dr. P proceeded with his diagnosis of fibromyalgia, treated with gabapentin and Lyrica, and saw the patient on multiple occasions over the next several months without substantial improvement. During that time, an ultrasound revealed multifocal soft tissue cysts, which Dr. P attributed to likely trauma and hematoma. When swelling of his patient's left leg failed to resolve, Dr. P scheduled an appointment for his patient to see a rheumatologist.

After taking the patient's history and examining her, the pediatric rheumatologist doubted fibromyalgia but was concerned about a malignancy.

Following the patient's return to Dr. P the next day, she was admitted to the hospital where she was diagnosed several days later with synovial cell sarcoma with multiple metastatic lesions in the lungs. The patient underwent surgery and chemotherapy but died 2 years later.

A lawsuit filed over Dr. P's care was heard by an arbitrator, who considered evidence on both Dr. P's actual care of his patient and on "causation"—that is, whether there was anything Dr. P could have done during the time of his treatment that would have prevented the patient's fatal injury. The arbitrator issued an award for the patient's family.

Certainly, Dr. P's judgment in calling for an orthopedic consult was sound. But when the patient's IPA denied the consultation, could he have done more for his patient than simply accept that denial? Under California Business and Professions Code Section 510, "It is the public policy of the State of California that a health care practitioner be encouraged to advocate for appropriate health care for his or her patients." The law was written not to establish the standard of care for healthcare providers, but to provide protection against retaliation against those who advocate for appropriate care for their patients.

The law goes on to explain: "For purposes of this section, 'to advocate for appropriate health care' means to appeal a payer's decision to deny payment for a service pursuant to the reasonable grievance or appeal procedure established by a medical group, independent practice association, preferred provider organization, foundation, hospital medical staff and governing body, or payer, or to protest a decision, policy, or practice that the health care practitioner, consistent with that degree of learning and skill ordinarily possessed by reputable health care practitioners with the same license or certification and practicing according to the applicable legal standard of care, reasonably believes impairs the health care practitioner's ability to provide appropriate health care to his or her patients."

Physicians frequently participate in appeals over denied authorizations by contacting the decision-maker directly or by otherwise assisting the patient and family in their pursuit of the authorization. Physicians should document a discussion with the patient and family on the rationale and importance of getting the test or consultation.

In some situations, to accept a denial without doing more could be like treating a patient with one hand tied behind your back.

This case comes from Medicine on Trial, originally published by Cooperative of American Physicians, Inc., to provide risk management lessons from litigated case histories. The article was originally titled "When Your Patient Needs You in Her Corner."


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